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Average rental period in UK is 18 months, new research shows
People renting a home in the UK spend an average of 18 months in the property before moving on with vacant properties being filled most quickly in Birmingham, new research has found. Birmingham has the lowest tenant turnover, with renters staying an average of two years and four months in the same property. Cardiff on the other hand, has the highest turnover, with the average property being vacated less than a year after being filled, according to the study by landlord insurance provider Direct Line for Business. Leeds at 12 months and Bristol at 14 months also have a high turnover of tenants, which could prove problematic for local landlords, the report says. The analysis also looked at the average time it takes to fill a vacated property revealing that on average, it takes a landlord 22 days to find a new tenant. This could result in an average loss of £547 in uncollected rent. When calculating the yield for a property, landlords need to take into account this void period and ensure they have sufficient resources to meet any mortgage, ground rent or other charges. Vacant properties in Birmingham are filled the quickest, with a landlord finding a tenant in just 11 days. However, in Liverpool and Aberdeen landlords struggle the most to fill their properties, taking an average of 33 days, to find a suitable candidate. Direct Line for Business's analysis estimates that this gap in rent could cost landlords as much as £761 in Liverpool and £913 in Aberdeen. Even with such a competitive rental market in London, letting agents in the capital claim that it takes 20 days on average to fill a property. With average monthly rents in central London surpassing £2,000 this could amount to a loss of £1,869 in income. The research also found that landlords can't always rely on occupants remaining in a property for the duration of their tenancy agreement, with 9% moving out early. The highest rate of tenancy turnover is in Aberdeen where 19% of tenants leave a property before the end of the tenancy agreement with Leeds and Sheffield both close behind at 13%. ‘This research highlights the pressure landlords are under to replace outgoing tenants in their properties. Vacant properties are obviously a worry for landlords but it's vitally important that they take into account void periods when calculating the affordability of owning a rental property,’ said Nick Breton, head of Direct Line for Business. ‘Staying on top of the on-going changes within the industry can be time-consuming and a battle for landlords and we fully appreciate the challenges they face when it comes to managing their rental properties,’ he added. The business has developed a Mobile Landlord app which can manage up to five properties aimed at alleviating some of the stress. The app can track income, calculate yields, set handy reminders such as when a tenancy agreement may be coming to an end and also keep landlords up to… Continue reading
UK home buyers most concerned about prices and mortgages
Financial worries dominate the thinking of today's generation of prospective home buyers in the UK with prices and getting a mortgage the biggest concerns, new research shows. The survey from the Home Builders Federation (HBF) also highlights the change in attitudes to home buying between young and old, showing that whilst 84% of 18 to 34 years olds still want to own their own home, there are huge financial obstacles to realising their dreams. Indeed, some 73% cited the difficulty of saving for a deposit, for 69% it is property prices and 53% the difficulty of getting a mortgage. The survey also found that one in four 18 to 34 year olds are totally unaware of any government support available to them, such as the 5% deposit Help to Buy equity loan scheme or the Help to Buy ISA aimed at helping young people save for a deposit. And overall younger people today are more concerned than their elders about the running costs of homes with 67% of 18 to 24 year olds taking this into account when considering whether to buy compared to 40% of 35 to 44 year olds. Younger people are also much more likely to consider buying a new build, which are up to 50% cheaper to run than some second hand homes with 55% saying it is likely they would consider buying a new build compared to just 23% of over 45s. It also identifies the huge amounts of money second hand home buyers spend on their properties with 47% of people spending over £10,000, and more than half incurring the expenditure associated with replacing bathrooms or kitchens. Some 13% of people spent over £40,000 upgrading their home and the HBF estimates it costs around £45,000 to upgrade a second hand home to the standard of a new build. The HBF also believes that there are a number of misconceptions about new build homes. With 34% of people polled saying they have never visited a new build or a show home and a further 18% saying they hadn't for at least 10 years, it points out that the industry faces a huge challenge engaging with the public to explain the many benefits of today's modern, high quality new build homes. Some 84% of 18 to 34 year olds that don't already own their own home aspire to do so and when buying a new home, the most important factors house hunters consider are price and location, both cited by 80%. However a greater proportion of younger house hunters, some 67% of 18 to 24 year olds, take into consideration the running costs of a property, compared to 55% across all age groups. The main obstacles for first time buyers trying to get on to the property ladder are saving for a deposit at 73%, property prices at 69% and getting a mortgage at 53%. Similarly, the main put-offs to buying a home for everyone is the deposit for 72%… Continue reading
Netherlands has best buy to let yields in European Union
The Netherlands is the best location for buy to let properties in the European Union with the highest rental yields of 6.57% as of April 2016, new research shows. Belgium and Portugal are also attractive locations for buy to let investments, taking second and third respectively in the EU buy to let league table compiled from research by international currency firm World First. Average yields were 6.47% in Belgium and 6.29% in Portugal while Sweden was at the bottom of the list with the worst yield at 2.88% with the UK with 4.28% placed 21 out of 29 countries. With an average rental yield of 6.57%, the Netherlands came top due largely to the relatively low price of buying property. The average one bedroom apartment costs just over £110,000 and a three bedroom house costs around £211,000. In the UK, the average price of a one bedroom apartment is £179,000 and a three bedroom house is £343,000. The firm suggests that Sweden has such low yields due to rental controls and a market that favours tenants and this climate will deter seasoned buy to let landlords looking for a decent return on their investment. France at 3.22% and Italy at 3.55%, already established hotspots for holiday homes, also have lower rental yields than their European neighbours and whilst they may make a great retirement or summer home for sun seekers, they may not be ideal locations for buy to let investors. The research also reveals slight differences when investing in buy to lets in city centres compared to suburbs and rural areas. For buy to let in city centres, Belgium takes the lead with yields of 6.54%. This is partly due to the dominance of Brussels as an expat destination for those working at or within the European Parliament, European Commission, Council of the European Union, and the European Council. For properties outside the city centre, the Netherlands again has highest yields at 6.78%, closely followed by Turkey at 6.65% and Portugal at 6.57%. World First research also shows that currency fluctuations in the past year have significantly impacted the affordability of property on the continent with property prices in Sweden 12% more expensive in 2016 compared to April last year. It also says that the recent weakness of the pound has also added over 11% to the price of property in the Eurozone with the average one bed apartment in the Netherlands rising from just over £117,000 to over £130,000. ‘With the recent changes to stamp duty tax for buy to let landlords, UK property investors looking to add to their portfolio might want to consider looking further afield to get the best returns,’ said Edward Hardy, market analyst at World First. ‘Our research shows that within the EU, the Netherlands, with relatively affordable property prices, holds the highest level of returns in Europe. On the other hand, countries that have policies in place to regulate rental prices like… Continue reading
